Baltimore City Council sues DraftKings and FanDuel
The recently filed lawsuit accuses the operators of abusive practices.
Key Points
- The Mayor and City Council of Baltimore have taken legal action against DraftKings and FanDuel
- The city has accused the pair of misleading and abusive consumer practices
- This accusation places the operators in breach of the city’s Consumer Protection Ordinance
- Baltimore City Council is now seeking injunctive relief, civil penalties and an alteration to the pair’s operational habits in the local area
The Mayor and City Council of Baltimore have taken operators DraftKings and FanDuel to court, following alleged breaches of the city’s Consumer Protection Ordinance related to accusations of misleading and abusive player acquisition and retention strategies.
Indeed, the lawsuit accuses the pair of exploitative bonus strategies which offer new players $150 in bonus bets – which come in individual $25 bets on DraftKings and in the form of increments on FanDuel – that must be used within the first seven days of a player signing up.
Further, the legal challenge against the pair also claims that they utilize large amounts of data on their players to ensure that continuous call-to-action notifications are distributed to their customers, as a constant retention strategy. The City of Baltimore also claims that the defendants intentionally target players who display problem gambling behavior.
These accusations would, if proven, place both DraftKings and FanDuel in breach of Baltimore’s Consumer Protection Ordinance. As such, the city is now seeking civil penalties, injunctive relief and a significant alteration to the way in which the operators conduct their respective operations in the Baltimore district.
As quoted in the lawsuit, the City Council of Baltimore stated, “FanDuel and DraftKings hook users and then use troves of user data to identify, target and exploit the most vulnerable among them, specifically seeking those who appear to have gambling disorders. Defendants’ actions are unfair, deceptive, abusive, willful, against public policy and prohibited by law.”
The suit continues, “This is no small matter: Those with gambling disorders have higher rates of suicidal ideation than even those struggling with other forms of addiction, and are often the perpetrators and victims of domestic violence.”
Good to know: In December, two US Senators called for an official antitrust investigation into both DraftKings and FanDuel
Elsewhere, DraftKings also reported its FY 2024 financial results in February, highlighting a reenue of $4.8bn paired with a 202.2% increase in net income loss during Q4 2024. More recently, FanDuel launched a plethora of newly developed responsible gambling initiatives during March – which is Problem Gambling Awareness Month in the US.
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